Zolotow v. Her Majesty the Queen in Right of Canada, The Minister of Public Safety and Emergency Preparedness and the Minister of Finance

[Indexed as: R. v. Zolotow]

89 O.R. (3d) 321

Court of Appeal for Ontario,

O'Connor A.C.J.O., Watt and Epstein JJ.A.

March 6, 2008

Courts -- Jurisdiction -- Concurrent jurisdiction -- Preferred jurisdiction -- Customs seizing diamonds from plaintiff on basis that he had failed to declare them when he brought them into Canada -- Plaintiff bringing action in detinue in provincial superior court seeking return of diamonds -- Provincial superior court and Federal Court both having jurisdiction over common law action in detinue against federal Crown -- Motion judge not erring in staying action on basis that Federal Court was court of preferred jurisdiction.

The plaintiff brought an action in detinue in the Superior Court of Justice seeking the return of diamonds which had been seized by Customs because of his failure to declare them when he brought them into Canada . The motion judge found that the Federal Court was the court of preferred jurisdiction for the plaintiff to advance his claim, and stayed the action. The plaintiff appealed.

Held, the appeal should be dismissed.

Even if the plaintiff was correct in his assertion that the action constituted a common law property claim and not a claim subject to the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.), both the Superior Court of Justice and the Federal Court have jurisdiction over a common law action in detinue against the Federal Crown. In circumstances of concurrent jurisdiction, s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 gives the motion judge the discretion to determine the preferred forum. The motion judge correctly recognized that, whether or not the Customs Act was ultimately held to apply, the action would involve an examination of the provisions of that Act and related jurisprudence. The Federal Court has more experience than the Superior Court of Justice in matters relating to the Customs Act and related issues. It was open to the motion judge to exercise his discretion to stay the action on the basis that the Federal Court was the preferred jurisdiction to hear the case.

APPEAL from the order of Jarvis J., [2007] O.J. No. 1882, 157 A.C.W.S. (3d) 545 (S.C.J.), staying an action.

David W. Stratas and Brad Elberg, for appellant. Christopher Parke and Maria Vujnovic, for respondents.

[1] Endorsement by THE COURT: -- Mr. Zolotow appeals from the order of Jarvis J. dated May 11, 2007, staying the appellant's action in the Superior Court of Justice on the basis that the Federal Court is the court of preferred jurisdiction. The action is a claim seeking the return of 20 diamonds, valued at approximately $900,000. The diamonds were seized from the appellant by Customs on April 13, 2000, purportedly under the [page322] Customs Act, R.S.C. 1985, c. 1 (2nd Supp.), on the basis that the appellant had failed to declare the diamonds when he brought them into the country.

[2] The main issue of concern in this appeal is whether the motion judge properly exercised his discretion to stay the action under s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43, based on his determination that the Federal Court is the court of preferred jurisdiction for Mr. Zolotow to advance his claim.

[3] Mr. Zolotow argues that his claim is a common law property claim. He contends that the Canadian Customs Revenue Agency took his property without legal authority. Accordingly, like any other person alleging that he has been wrongfully deprived of property, Mr. Zolotow states that his recourse is to pursue an action in detinue and that the Ontario Superior Court of Justice has jurisdiction to determine his action.

[4] He submits that his claim is not subject to the Customs Act, because the taking of the diamonds was not a "seizure" within the meaning of that Act. The basis of this submission lies in s. 113 of the Act, which provides that no taking of goods, that are subject of an alleged contravention of the Act, may be made more than six years after the contravention. Mr. Zolotow's position is that the seizure was not done pursuant to the Act, as the Customs authorities seized the diamonds outside of the six-year time period,

[5] The problem with the appellant's argument on this point is that, even if he is correct in his assertion that the action constitutes a common law property claim, and not a claim subject to the Customs Act, the jurisdictional issue remains an open question for determination. It is agreed that both the Superior Court of Justice and the Federal Court have jurisdiction over a common law action in detinue against the Federal Crown. In circumstances of concurrent jurisdiction, s. 106 of the Courts of Justice Act gives the motion judge the discretion to determine the preferred forum.

[6] Here, the motion judge exercised this discretion upon proper principles to draw the conclusion that the preferred jurisdiction for Mr. Zolotow to advance his claim in relation to his property was the Federal Court.

[7] The motion judge observed that the Notice of Seizure was evidence that the seizure took place, purportedly at least, under the authority of the Customs Act. Indeed Mr. Zolotow challenged that Notice of Seizure, albeit belatedly, under the procedure in the Customs Act.

[8] Against that background, the motion judge recognized, correctly in our view, that the determination of the pivotal issue of [page323] the jurisdiction of the Customs Act -- regardless of whether or not it is held that the Customs Act applies -- will involve some examination of the provisions of the Act and related jurisprudence.

[9] The Federal Court has more experience than the Superior Court of Justice in matters relating to the Customs Act and related issues.

[10] In the circumstances we think it was open to the motion judge to exercise his discretion to stay the action on the basis that the Federal Court is the preferred jurisdiction to hear the case.

[11] The appeal is dismissed. If counsel are unable to resolve the issue of costs, they may make written submissions to the court within 15 days.

Appeal dismissed.